Paypal supports direct withdrawal to bank account

Today I got a mail from Paypal informing that they now supports direct withdrawal of funds into an Indian bank account. This is surely going to be a great relief to all Indian Webmasters.

Previously fund withdrawal had been a headache for most of the Indian Paypal users. One had to request for a check from Paypal and wait for almost a month for the check to arrive. Many people found this difficult and made use of services like Xoom for transferring money to their Indian bank account. But with the two latest withdrawal features, i.e. Direct Bank withdrawal and balance transfer to a Visa ® branded credit card, Paypal is going to be much more popular among the online Indian community.

Now the charge for transferring fund has also been reduced. Previously, while requesting a new check you had to pay $5 as processing charge. Now the  processing fee has been waived for transfers above INR 7000 and for amounts less than that you have to pay only a marginal fee of INR 50. Xoom used to charge $14.99 for transfers over $500 and $9.99 for smaller transfers.

With the new withdrawal feature the time taken for transferring money to reduced to 5-7 business days. Though the waiting period has reduced from about a month to a week, it is still long compared to the time taken by Xoom transfers to complete. With Xoom, I used to get my check within 3-4 business days.

Existing Indian Paypal users can avail this new feature by adding your bank account [1] to your Paypal account by providing your Country, Bank name, Indian Financial System Code (IFSC) and Account number. Ensure that your name in the bank record and PayPal are exactly the same or your transaction will fail and PayPal will also charge a processing fee of INR 250.

Indian Financial System Code (IFSC) is an alpha numeric code designed to uniquely identify the bank-branches in India. This is 11 digit code with first 4 characters representing the banks code, the next character reserved as control character (Presently 0 appears in the fifth position) and remaining 6 characters to identify the branch. This is different from the MICR code, which has 9 digits to identify the bank-branch. If you don’t know your branch’s IFS Code, then contact your bank’s customer care. Alternatively, you can also find the code from the list of IFS codes for Indian banks published by RBI.

You can transfer the fund to your account with any of the participating banks. The banks that are currently participating in the service are HDFC Bank, ICICI Bank, ING VYSYA Bank, Axis Bank (formerly UTI Bank), Standard Chartered Bank, State Bank Of India, Bank Of India, Canara Bank, Union Bank of India, HSBC and Citibank India.